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2.2 billion people are poor or near-poor, warns 2014 Human Development Report on vulnerability and resilience

24 Jul 2014

Tokyo, 24 July 2014 — Persistent vulnerability threatens human development. And unless it is systematically tackled by policies and social norms, progress will be neither equitable nor sustainable. This is the core premise of the 2014 Human Development Report, released here today by the United Nations Development Programme (UNDP).

According to income-based measures of poverty, 1.2 billion people live with $1.25 or less a day. However, the latest estimates of UNDP Multidimensional Poverty Index reveal that almost 1.5 billion people in 91 developing countries are living in poverty with overlapping deprivations in health, education and living standards. And although poverty is declining overall, almost 800 million people are at risk of falling back into poverty if setbacks occur.

“By addressing vulnerabilities, all people may share in development progress, and human development will become increasingly equitable and sustainable,” stated UNDP Administrator Helen Clark today.

The 2014 Human Development Report comes at a critical time, as attention turns to the creation of a new development agenda following the 2015 deadline for achieving the Millennium Development Goals.

Zeroing in on what holds back progress

The Report holds that as crises spread ever faster and further, it is critical to understand vulnerability in order to secure gains and sustain progress.

It points to a slowdown in human development growth across all regions, as measured by the Human Development Index (HDI). It notes that threats such as financial crises, fluctuations in food prices, natural disasters and violent conflict significantly impede progress.

“Reducing both poverty and people's vulnerability to falling into poverty must be a central objective of the post 2015 agenda,” the Report states. “Eliminating extreme poverty is not just about 'getting to zero'; it is also about staying there.”

A human development lens on who is vulnerable and why

“Reducing vulnerability is a key ingredient in any agenda for improving human development,” writes Nobel laureate Joseph Stiglitz, in a contribution to the Report. “[We] need to approach it from a broad systemic perspective.”

The 2014 Report takes such an approach, using a human development lens to take a fresh look at vulnerability as an overlapping and mutually reinforcing set of risks.

It explores structural vulnerabilities – those that have persisted and compounded over time as a result of discrimination and institutional failings, hurting groups such as the poor, women, migrants, people living with disabilities, indigenous groups and older people. For instance, 80 percent of the world’s elderly lack social protection, with large numbers of older people also poor and disabled.

The Report also introduces the idea of life cycle vulnerabilities, the sensitive points in life where shocks can have greater impact. They include the first 1,000 days of life, and the transitions from school to work, and from work to retirement.

“Capabilities accumulate over an individual’s lifetime and have to be nurtured and maintained; otherwise they can stagnate and even decline,” it warns. “Life capabilities are affected by investments made in preceding stages of life, and there can be long-term consequences of exposure to short-term shocks.”

For example, in one study cited by the Report, poor children in Ecuador were shown to be already at a vocabulary disadvantage by the age of six.

Timely interventions—such as investments in early childhood development—are therefore critical, the Report states.

Poor countries can afford universal provision of basic social services

The Report advocates for the universal provision of basic social services to enhance resilience, refuting the notion that only wealthy countries can afford to do this. It presents a comparative analysis of countries of differing income levels and systems of government that have either started to implement or have fully implemented such policies.

Those countries include not only the usual suspects such as Denmark, Norway and Sweden, but also fast-growing economies such as South Korea and developing countries such as Costa Rica.

“These countries started putting in place measures of social insurance when their Gross Domestic Product (GDP) per capita was lower than India’s and Pakistan’s now,” the Report observes.

However, “there may be instances in which equal opportunities require unequal treatment,” notes Khalid Malik, Director of UNDP’s Human Development Report Office. “Greater resources and services may need to be provided to the poor, the excluded and the marginalized to enhance everyone’s capabilities and life choices.”

Putting full employment back atop the global policy agenda

The Report calls for governments to recommit to the objective of full employment, a mainstay of macroeconomic policies of the 1950s and 1960s that was overtaken by competing policy goals following the oil shocks of the 1970s.

It argues that full employment yields social dividends that surpass private benefits, such as fostering social stability and cohesion.

Acknowledging the challenges that developing countries face with respect to full employment, it urges a focus on structural transformation “so that modern formal employment gradually incorporates most of the workforce,” including a transition from agriculture into industry and services, with supporting investments in infrastructure and education.

Social protection is feasible at early stages of development

The majority of the world’s population lacks comprehensive social protections such as pensions and unemployment insurance. The Report argues that such measures are achievable by countries at all stages of development.

”Providing basic social security benefits to the world’s poor would cost less than 2 percent of global GDP,” it asserts. It cites estimates of the cost of providing a basic social protection floor—including universal basic old age and disability pensions, basic childcare benefits, universal access to essential health care, social assistance and a 100-day employment scheme—for 12 low-income African and Asian countries, ranging from about 10 percent of GDP in Burkina Faso to less than 4 percent of GDP in India.

“A basic social protection package is affordable so long as low-income countries reallocate funds and raise domestic resources, coupled with support by the international donor community,” it states.

Collective effort, coordinated action needed at global level

The Report also calls for stronger collective action, as well as better global coordination and commitment to shoring up resilience, in response to vulnerabilities that are increasingly global in origin and impact.

Threats ranging from financial crises to climate change to conflicts and refugee flows are trans-national in nature, but the effects are experienced locally and nationally and often overlap. Take the case of Niger, which has faced severe food and nutrition crises brought on by a series of droughts. In the midst of a food crisis shared with other countries in the region, Niger had to cope with the additional challenges posed by thousands of people fleeing conflict in neighbouring Mali.

Trans-national threats cannot be resolved by individual nations acting independently; they require a new focus from the international community that goes beyond short-term responses like humanitarian assistance, the Report argues.

To increase support for national programmes and open up policy space for nations to adapt universalism to specific country conditions, the Report calls for “an international consensus on universal social protection” to be included in the Post-2015 agenda.

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ABOUT THIS REPORT: The Human Development Report is an editorially independent publication of the United Nations Development Programme. For free downloads of the 2014 Human Development Report, plus additional reference materials on its indices and specific regional implications, please visit: http://hdr.undp.org

UNDP partners with people at all levels of society to help build nations that can withstand crisis, and drive and sustain the kind of growth that improves the quality of life for everyone. On the ground in 177 countries and territories, we offer global perspective and local insight to help empower lives and build resilient nations.